For the first time in six weeks, the average interest rate on long-term mortgage loans fell below 7% last week, a welcome windfall for spring homebuyers. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage dropped to 6.94% during the week ended May 23, 2024, from 7.02% the week before. It is up from 6.57% a year ago, however. Although the past week showed a decline in existing home sales, these lower rates may boost sales in the coming week.
More Than a Third of Single-Family Homes Are New Builds
Of all the single-family U.S. homes for sale in the first quarter of 2024, more than a third (33.4%) were newly built, according to a report from Redfin, a rate nearly double that from before the pandemic. The National Association Home Builders says the difference is the lack of existing home inventory, not a ramp up in building. Homebuilders are still constructing about 1 million single-family homes a year, similar to pre-pandemic numbers. With most current homeowners locked into mortgage rates below today’s rates, fewer are willing to sell and take on much higher home loan fees.
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